How to flow gross from recon to your bottom line

If you still run your recon department on "gut feel" and not metrics, you're losing money. Metrics -- hard performance data -- is the roadmap to moving hidden treasure in your recon department.

Manage recon by the facts and you'll flow significant gross to your bottom line. This article explains how.

How's Your Recon?

Every week, I talk to dozens of dealership managers. These conversations convince me that gut-feel management continues to rule recon. The solution is explaining how recon metrics influence gross.

When the used car manager measures results using retail gross dollars, and not true gross dollars, a false outcome is painted. True gross results when two key recon metrics are subtracted from retail gross, which are holding costs multiplied by each vehicle for each day.

Because many managers aren't clear about holding costs, they tell me their recon is running efficiently, when it's likely not. A large Midwest dealership believed it was managing a five-day recon cycle, which when metrics were applied showed them at 10 days.

Unfortunately, a 10-plus day recon is common, and doing nothing to shorten the cycle is a gross killer.

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